ABSA’S share price fell 2.13 percent to R135.50 on Friday after its board announced that prominent businessman Sipho Pityana would be removed as lead independent director with immediate effect, although he will remain on the board as a director.
The share price fell the most of the country’s four biggest banks. His removal followed his decision to take the Reserve Bank’s Prudential Authority to court for allegedly unfairly blocking his candidacy as Absa’s chairman, which allegedly was due to a claim of sexual harassment made against him during his time as chairperson of Anglo Ashanti, a claim that Pityana has denied.
At the end of last month Absa announced former Momentum Metropolitan chair Sello Moloko as chairman designate, with effect from December 1 2021. Moloko takes over from current chairman Wendy Lucas-Bull, who steps down on March 31, 2022, after nine years on Absa’s board.
Pityana has claimed previously that the Prudential Authority blocked him from becoming chair by conducting an informal process and consulting with third parties, including former Absa bank chief executive Maria Ramos, about whether he was “fit and proper” for the role.
Pityana claims Ramos used an allegation of sexual harassment against him that dates back to 2020 while he was chairperson of AngloGold Ashanti, and that the Prudential Authority did not allow him to defend himself.
Meanwhile, Absa also announced last week John Cummins, former group treasurer at the Royal Bank of Scotland, will join its board today as an independent non-executive director. He is currently also independent non-executive director of Lloyds Bank Corporate Markets, and chairman of its risk committee.
In addition, Absa said Mark Merson would step down from its board from January 31, 2022. Merson, who became an independent non-executive director with effect from October 2017, remains chairman of Absa Securities UK.
The latest boardroom tension at Absa follows an equally controversial decision in April by former Absa CEO Daniel Mminele, to step down, citing differences of opinion on strategy, after little more than a year in the job. Mminele was a former deputy Reserve Bank governor.
Reports suggested yesterday that Pityana knew some of Absa’s board members were unhappy about his litigation. Pityana joined the board in May 2019.
Meanwhile, the Fitch rating agency said Friday that “several changes at board and executive management level since end-2019 pose risks to continued successful strategy execution over the medium term,” even though Absa Group “has demonstrated strong execution capabilities in its separation from its former majority shareholder, Barclays plc, and through the pandemic.”
Fitch affirmed Absa Group (ABG) and its main operating subsidiary Absa Bank (ABL) Long-Term Issuer Default Ratings at “BB-”. The outlooks were negative, with the ratings constrained by the sovereign rating (BB-/negative), reflecting the concentration of their activities in the country, and high sovereign-related exposure relative to equity.
BUSINESS REPORT ONLINE